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California lawmakers gave Lyft Inc. and Uber Technologies Inc. drivers the right to
avoid city business license requirements by approving a bill that the transportation
network companies championed.

Senators late Sept. 11 gave the final blessing to
S.B. 182, which allows transportation network company (TNC)
drivers to register for a business license where they live, not where they drive.
The city of San Francisco, the California State Association of Counties, and the League
of California Cities opposed the measure. Senators voted 32-4 to concur with Assembly
amendments and sent the bill to Gov. Jerry Bown (D).

“Uber supports SB 182 because it protects drivers from unreasonable fees and invasions
of their privacy. This bill fixes a growing issue that is felt by thousands because
of an outdated licensing system that doesn’t fit this growing industry,”
Christopher Ballard, Uber general manager for the southwest, told Bloomberg BNA in
a Sept. 12 email.

A Lyft representative didn’t immediately respond to a request for comment.

“TNC drivers cross many city lines every day picking up and dropping off riders, and
simply put, it would be untenable if drivers were required to obtain a license in
every city they cross through,” Robert Callahan, executive director of the Internet
Association that sponsored the bill, said in a Sept. 12 statement to Bloomberg BNA.

Separately,
A.B. 1069 pending on the Senate floor would prohibit a city except for San Francisco and transit
agencies from requiring a taxicab service provider to obtain a business license unless
that taxi only operates in city boundaries. It’s meant to level the playing field
with taxis losing business to TNCs.

The legislative action comes as the TNCs and San Francisco are in court over driver
information, and the California Public Utilities Commission (CPUC) is considering
how to publicly provide data about the ride-hailing operations.

Lawmakers have until Sept. 15 to pass bills and send to Brown. Brown’s office declined
to comment on pending legislation.

‘Rewrites Rules’

San Francisco, where TNCs drive 570,000 miles within the city on a typical weekday,
heavily lobbied against the bill. Just 29 percent of TNC drivers hailed on San Francisco
streets are from the city, a June San Francisco County Transportation Authority
report said.

More than 130,000 San Francisco businesses pay a business license that the city argues
is indeed a tax that applies to drivers as other business.

“SB 182 is—by design—unenforceable. Until this special interest carve-out, businesses
operating in San Francisco all had to play by the same rules,” Amanda Kahn Fried,
policy and legislative manager in the office of the San Francisco Treasurer & Tax
Collector, told Bloomberg BNA in a Sept. 12 email.

San Francisco Fight

The San Francisco-based TNCs also are fighting their hometown in court over the city’s
push to obtain driver information.

Uber is appealing a trial judge’s June order rejecting the company’s motion to quash the Treasurer-Tax
Collector’s subpoena seeking driver information.

Lyft and San Francisco return Oct. 5 to California Superior Court as Lyft
resists San Francisco’s subpoena seeking information the TNC annually files with the CPUC.
The data includes accessible vehicles, driver violations and suspensions, hours and
miles that drivers log, and service by zip code.

CPUC Actions

The CPUC is now considering posting TNC data online. The Internet Association, whose
members include Airbnb Inc., Google, Lyft, and Uber,
argues against sharing that information.

Sharing “personal and proprietary data from ridesharing companies would diminish trust
between TNCs and their customers who expect their data will be kept secure, as well
as cause the unnecessary divulgence of internal trade secrets that would impair competition
among firms in the market,” the trade group said in a CPUC filing.

The San Francisco Municipal Transportation Agency
(SFMTA) and San Francisco International Airport (SFO)
counter that the hands-off approach isn’t working.

“Unfortunately, the streets of San Francisco and other cities are now choked with
more cars than ever, but because the Commission has elected not to make TNC data publicly
available, it is difficult to fully understand the cause of the problem,”
SFMTA and SFO said in a joint CPUC filing released Sept. 12.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at
JCutler@bna.com

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